The Real Deal New York

Maryland ruling could unburden NYC pied-à-terre owners

NYC’s statutory residency test may be unconstitutional

May 24, 2015 03:00PM

The U.S. Supreme Court has ruled against Maryland’s tax regime in Comptroller v. Wynne. And that could be a victory for wealthy owners of second homes in New York who face double taxation on investment income.

“I believe it’s clear now that the New York statutory residency test is unconstitutional,” Arthur Rosen, a state and local tax lawyer with McDermott, Will & Emery, told Forbes. In fact, second home owners in New York who are paying double taxes on investment income – “to New York as statutory residents and to their home state as domiciliaries” – are due tax refunds, he added.

Nevertheless, the New York Department of Taxation isn’t conceding anything. “We’re continuing to review the case,” a spokesperson told Forbes.

The Supreme Court ruled that a Maryland income-tax policy was unconstitutional because it violated the Commerce Clause by hindering interstate commerce through double taxation. [Forbes] – Christopher Cameron